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The International Air Transport Association (IATA) released data for global air freight markets showing that demand, measured in freight tonne kilometers (FTKs), rose 5.9% in October 2017 compared to the year-earlier period. This was a slowdown from the 9.2% annual growth recorded in September 2017 but still exceeded the average annual growth rate of 3.2% over the past decade.

Freight capacity, measured in available freight tonne kilometers (AFTKs), rose by 3.7% year-on-year in October. This was the 15th consecutive month in which demand growth outstripped capacity growth, which is positive for load factors, yields, and financial performance.

While cargo demand remains strong, several indicators show that we may have passed the growth peak. The inventory-to-sales ratio in the US is tracking sideways, indicating that the period when companies look to restock inventories quickly—which often gives air cargo a boost—has ended. The new export orders component of the global Purchasing Managers’ Index (PMI) is stable. And the upward trend in seasonally-adjusted freight volumes has moderated.

Freight volumes are still expected to grow in 2018, although at a slower pace than in 2017.

“Demand for air freight grew by 5.9% in October. And tightening supply conditions in the fourth quarter should see the air cargo industry deliver its strongest operational and financial performance since the post-global financial crisis rebound in 2010,” said Alexandre de Juniac, IATA’s Director General and CEO.

Airlines in all regions reported an increase in total year-on-year demand in October. However, in contrast, international freight growth slowed in all regions except Africa.

• Asia-Pacific airlines saw freight volumes increase by 4.4% and capacity expanded by 3.9% in October 2017, compared to the same period last year. Demand for freight is now around 3% higher than the peak reached in the post-financial crisis rebound in 2010. The region’s manufacturers continue to enjoy buoyant order books. And the major exporters in China and Japan are reporting growing backlogs supported in part by stronger economic activity in Europe.

• North American carriers posted an increase in freight volumes of 6.6% for October. This was a slowdown from the 7.4% recorded in September but still ahead of the five-year average pace of growth. Capacity increased 3.8%. The strength of the US economy and the US dollar has boosted the inbound freight market in recent years. Data from the US Census Bureau shows an 11.6% year-on-year increase in air imports to the US in the first nine months of 2017, compared to a slower rise in export orders of 6.5%.

• European airlines posted a 6.4% increase in freight demand in October 2017. This was a marked slowdown from the 10.6% growth in demand in September, however it was still above the five year average of 9.0%. Capacity increased 2.5%. Concerns that the recent strengthening of the euro might have affected the region’s exporters have not materialized yet. Europe’s manufacturers’ export orders are growing at their fastest pace in more than seven years. Freight demand remains very healthy on transatlantic routes and is strong on routes to and from Asia – having received a boost in trade from the economic stimulus measures put in place by China.

• Middle Eastern carriers’ year-on-year freight volumes increased 4.6% in October and capacity increased 3.4%. During the same period international freight volumes slowed to 4.7% from 9.2% the previous month. The recent volatility produced by the region in the year-on-year growth rate for international freight volumes is due to developments in demand in 2016 rather than a marked change in the current traffic trend. In fact, seasonally-adjusted international freight volumes have continued to trend upwards at a rate of 8-10% over the past six months.

• Latin American airlines experienced a growth in demand of 7.2% in October and a capacity increase of 4.4% compared to the same period in 2016. International freight volumes rose by 7.7% over the same period. This is nearly nine times the five-year average rate of 0.9%. The pick-up in demand reflects signs of recovery in the region’s largest economy, Brazil. Seasonally-adjusted international freight volumes are now back to the levels seen at the end of 2014.

• African carriers posted the largest year-on-year increase in demand of all regions in October, with freight volumes rising 30.3%. Capacity increased 9.2%. During the same period international freight volumes grew by 28.5%. This is more than three times the five-year average growth pace of 9.4%. Demand has been boosted by very strong growth on the trade lane to and from Asia, which increased by more than 67% in the first nine months of the year.